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The April 2026 edition of Fox & Mandal's Dispute Resolution & ADR Newsletter analyses the availability of interim relief during a foreign award's enforcement proceeding; enforceability of foreign decrees despite FEMA and RBI violations; Primacy of the principal agreement in determination of the arbitral seat in a transaction involving multiple contracts; and other recent judgments of the Supreme Court of India and various High Courts.
- Interim relief remains available during the pendency of a foreign award's enforcement petition
- Foreign decrees remain enforceable despite FEMA and RBI compliance objections
- Primary agreement determines the arbitral seat in transactions involving multiple contracts
- Commercial wisdom of CoC remains subject to limited judicial review for legal errors
- Contractually barred pre-award and pendente lite interest cannot be granted as 'compensation'
- 'Faultless parties' can seek a fresh appointment after the erstwhile arbitrator's mandate has been refused extension
Interim relief remains available during the pendency of a foreign award's enforcement petition
Osterreichischer Lloyd Seereederei (Cyprus) Ltd v. Victore Ships Pvt Ltd
Bombay High Court | 2026 SCC OnLine Bom 1868
A key practical concern in the enforcement of foreign awards is whether a foreign award-holder seeking its recognition and enforcement can avail protective measures prior to the award attaining the status of a decree in India? The Bombay High Court recently held that interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 (Act) is available in respect of a foreign award even after filing an enforcement petition under the Act.
The ruling recognises the real risk of asset dissipation in the period between the filing of an enforcement petition and the Court's determination under Section 49, which could ultimately render the foreign award ineffective, unless interim protection remains available.
By affirming the availability of such interim measures, the judgment closes an important enforcement gap and strengthens the enforcement framework of foreign awards in India.
SUMMARY OF FACTS
After achieving a favourable foreign award, Osterreichischer Lloyd Seereederei (Cyprus) Ltd (OLSL) sought its enforcement against the awarddebtor, Victore Ships Pvt Ltd (VSPL), under Sections 47 and 48 in Part II of the Act (dealing with foreign awards) and, in parallel, filed a petition under Section 9 (pertaining to the grant of interim measures) seeking the following interim protective measures:
- A deposit of the awarded amount in INR equivalent within 4 weeks.
- An injunction against alienation or creation of third-party rights in VSPL's assets pending such deposit.
- An aWidavit disclosing VSPL's assets.
VSPL opposed the Section 9 petition, contending that once an enforcement petition had been filed, the award-holder could no longer invoke Section 9, since enforcement (conversion or treatment of the award as a decree) and execution (taking steps towards realising the decree) of a foreign award form part of a composite proceeding.
OLSL, on the other hand, contended that a foreign award does not automatically attain the status of a decree upon filing of enforcement proceedings, and that until the court is satisfied under Section 49 that the award is enforceable, the Section 9 relief remains available to secure the fruits of the award.
DECISION OF THE COURT
While assessing whether the Section 9 remedy ceases after a petition for enforcement of a foreign award under Part II has been filed, the Court drew a clear distinction between the statutory treatment of domestic awards and foreign awards:
- A domestic award becomes enforceable as if it were a decree under Section 36 of the Act (enforcement of domestic awards) upon expiry of the period to challenge the award under Section 34, failure of such challenge, or refusal of stay therein.
- By contrast, a foreign award becomes enforceable in India only after the Court, acting under Part II, is satisfied that the award is enforceable and consequently deems it to be a decree under Section 49 of the Act.
Therefore, the mere filing of an enforcement petition does not by itself confer decree status on a foreign award and does not terminate the jurisdiction of the Court under Section 9.
The Court also rejected VSPL's argument that a Section 9 relief alongside a pending enforcement petition would create an anomalous overlap of jurisdictions. A petition for enforcement of a foreign award under Part II is, in the first instance, a proceeding for recognition and enforceability. Only after the Court records satisfaction under Section 49 of the Act that the award is enforceable, does the proceeding stand translated into execution without the need for a separate execution petition. Until that stage is reached, there is no statutory basis to infer that interim relief under Section 9 is barred.
Foreign decrees remain enforceable despite FEMA and RBI compliance objections
Peter Beck und Partner Vermögensverwaltung GmbH v. Prakash Industries Ltd
Delhi High Court | Execution Petition No. 87 of 2022
In an important decision for cross-border financing and enforcement strategy, the Delhi High Court held that enforcement of a foreign decree in India is permitted despite allegations of violations of guidelines prescribed under the Foreign Exchange Management Act, 1999 (FEMA). This ruling reinforces India's pro-enforcement approach and limits the ability of judgment debtors toresist execution on technical regulatory grounds.
Drawing a clear distinction between the enforceability of a decree and post-enforcement regulatory compliance, the decision aligns Indian jurisprudence with global principles of comity and certainty in international commerce. Indian entities must recognise that FEMA and RBI compliance obligations continue to apply and may require post-facto approvals or structuring adjustments. As such, stakeholders in cross-border transactions should ensure proactive regulatory compliance and documentation at the transaction stage to mitigate post-enforcement risks.
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